Trading, Settlement, and Corporate Actions
Security purchases or sale orders with no specified price
Market Orders
requires the customer to pay for all transactions in full at the time of purchase
Cash Account
an attempt to make monies that were gained through illegal or unethical means appear legitimate
Money Laundering
implemented in the event of an emergency or other significant business disruption, based on a firm’s size and structure
Business Continuity Plans (BCPs)
is written communication (including electronic communications) that is distributed or made available to 25 or less retail investors within any 30-calendar-day period
Correspondence
Orders to either buy a stock at or below a specific price or sell a stock at or above a specified price
allows investors to borrow from their broker-dealer against securities they own
Margin Account
the money launderer places the tainted money into the financial system by depositing the funds in a financial institution or converting the cash into negotiable instruments, like cashier’s checks, money orders, or traveler’s checks
Placement
requires investment advisers or broker-dealers with physical custody of a customer’s securities, including those used as collateral on a margin account, to keep those securities in a safe place
Customer Protection Rule
prohibit firms or their associated persons from making calls to the residence or wireless phone of a person before 8 a.m. or after 9 p.m
FINRA Telemarketing Rules
instructions to enter an order only if a stock goes down to or up to a specific price
Stop Order
are contracts between a buyer and seller wherein the buyer has the right (not the obligation) to buy or sell an underlying security, such as a stock or exchange-traded fund, at a specific price (the strike price) within a specific period of time.
Options
generally seen as the first attempt to disguise the source of funds by creating complicated layers of financial transactions with the money
Layering
requires that firms adopt policies and procedures to address the protection of customer information and records
Regulation S-P
require that members use reasonable diligence to know essential facts about every customer when opening and maintaining accounts
FINRA Know your Customer Rules
an order to buy or sell stock that must be fulfilled in its entirety or be canceled
Fill-or-Kill Order
are employer-provided pension plans and, at one time, were what retirees relied on after putting in their 25 or 30 years at a particular job
Defined Benefit Plans
involves moving layered funds into the economy
Integration
An Account Record Must be kept for each account whose owner or a customer is a natural person. Record must include:
name, tax ID #, Address, Phone, DOB, Employment status, annual income, and net worth
is a customer’s “ability and willingness to lose some or all of [the] original investment in exchange for greater potential returns.”
Risk Tolerance
the value of a security or the market is on the rise, and the economy is viewed as sound
Bull Market
created with businesses with less than 100 employees in mind
SIMPLE Plan
measures designed to mediate the risk of providing services to parties subject to U.S. sanctions
Risk Mitigation
impose specific recordkeeping requirements on broker-dealers in connection with purchase and sale documents, customer records, associated person records, customer complaint records, and other matters
True of False:
A customer investment profile typically contains the customers: Age, Other investments, Financial Situation, tax status, objectives, experience, time horizon, liquidity needs, and risk tolerance
TRUE